This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: Rules and Derivatives Moves Helped Do In Summers

Stocks in this article: C JPM

More recently, opponents on the left have raised concern with Summers' role as director of the Obama administration's National Economic Council in the period immediately after the height of the financial crisis. Donald Lamson, partner at Shearman & Sterling LLP in Washington, said Summers' "perceived friendliness" to banks during the crisis contributed to criticism about him.

As the prospect of the Obama administration nominating Summers increased in recent weeks, opposition on Capitol Hill surged as well. At least four Democrats on the all-important Senate Banking Committee indicated they would oppose him. Summers would have had to survive a contentious nomination hearing and vote of the Senate Banking Committee. Had he survived that, the next step would have been to obtain the filibuster-proof 60 votes needed to be approved by the full Senate, a prospect that also required some Republican support, especially with a handful of Democrats in opposition.

Sen. Jon Tester, a moderate Democrat on the banking panel, indicated that he was opposed late last week, adding his name to three other more left-leaning Democratic opponents. The opposition by Tester may have been a tipping point, Boston University's Hurley noted. "That had to hurt," he added.

Another key factor in Summers unraveling was the backing by a number of Democratic lawmakers of Janet Yellen, the Fed's current vice chairman, for the top Fed job. A group of senators, including Sen. Jack Reed, Democrat of Rhode Island and a member of banking panel, recently signed a letter pushing for Yellen to take the job, according to a person familiar with the letter.

Nevertheless, it is unclear whether Obama will ultimately pick Yellen. Many believe that she will likely be nominated. Brian Gardner, an analyst at Keefe, Bruyette & Woods Inc., notes that many of the activist groups that opposed Summers support Yellen, indicating to him that she "is the likely nominee."

However, some observers contend that Obama may not want to appear as if he has caved in to congressional Democrats and therefore he will try to find someone else.

Other possible candidates include former Treasury Secretary Timothy Geithner; Donald Kohn, who was the central bank's vice chairman until 2010; and Roger Ferguson, also a former Fed vice chairman and now chief executive of the public pension fund TIAA-Cref. Other names bandied about include former White House adviser Christina Romer and Stanley Fischer, who previously was chief of the Bank of Israel. Current Fed chairman Ben Bernanke could also stay on for another term.

-- Written by Ronald D. Orol in Washington

2 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs